EXHIBIT (10.33) - SHANDONG PROVINCE AGREEMENT
( English Translation )
COOPERATION AGREEMENT
Party A: Ministry of Education
ShanDong Province
Party B: Beijing Tengtu TianDi Network Co. Ltd.
Based on the foundation of the already signed Memorandum of Intent
regarding the cooperation framework between the Audio / Visual Education
Department under the Ministry of Education of the ShanDong Province and Beijing
Tengtu Co. , both Parties have now reached the following agreement on the
establishment of the ShanDong Province Educational Information Network and the
implementation of the " School-To-School Connection - Phase I " project.
Agreement # 1 : Definition
1. "School-To-School Connection Phase I " Project
Under the Agreement, all the elementary / secondary schools under Party A shall
be connected with the Morning Sun Resources Center of the National Center for
Audio / Visual Education under the Ministry of Education through the
Satellite-Based Broadband Educational Network.
2. Main-Trunk Network of the ShanDong Province Educational Information
Network
This Main-Trunk Network is formed by 4-level Centers : the Provincial
Educational Information Center, Regional Node-Center, City-Level Educational
Information Center, and the County-Level Educational Information Center, thus
realizing broadband connection for these 4-level Centers. Upon completion of the
establishment of the Main-Trunk Network, it is then able to fully support
educational system office automation, educational information dissemination on
the network, and mutual sharing of various types of educational resources.
Agreement # 2 : Cooperation Items
1. Parties A and B shall jointly set up the technical specifications and system
commissioning standards in order to fully support the establishment of the
ShanDong Province Educational Information Network and its associated educational
resources.
2. Parties A and B shall jointly implement the " School-To-School Connection -
Phase I " Project in order to provide the Information Technology ( IT )
educational environment for the elementary / secondary schools in ShanDong
Province.
Agreement # 3 : Rights and Responsibilities of Party A
1. Responsible for stipulating the related policies and implement associated
procedures to encourage all regions to establish the various levels of
educational information centers according to the technical standards and
timescales set up by both Parties.
2. Responsible for coordinating with all the Connection Channel Providers.
3. Promises to utilize Party B's investment reasonably and efficiently;
and accept the supervision of the utilization of funding by Party B.
4. Promises to allow Party B to act as the strategic partner of the
"School-To-School Connection Phase I" Project for the ShanDong Province.
5. Responsible for the unified management of the operation of the ShanDong
Province Educational Information Network.
6. Jointly stipulate with Party B the redeemable resources utilization
policy and standard.
7. Resources will be provided on redemption and downloaded with
authorization.
8. In order to guarantee that Party B is able to redeem its investment, Party A
shall request all the elementary / secondary schools in the Province to
gradually connect to the Broadband Satellite Network and the Main-trunk Network
of the ShanDong Province Educational Network.
9. Implements positive measures to encourage and support all the elementary /
secondary schools in ShanDong Province to use Party B's educational software
jointly promoted by the Ministry of Education and Party B under " Operation
Morning Sun " .
10. To complete the implementation of the " School-To-School Connection Phase I
" project for at least 1,000 elementary / secondary schools within the period
from July 1 to September 30, 2001.
11. To complete the " School-To-School Connection Phase I " project associated
with at least 5,000 elementary / secondary schools before the end of the
calendar year 2001.
12. To complete the implementation of the "School-To-School Connection Phase I "
project for approximately 12,000 elementary / secondary schools before the
calendar year 2002.
13. Set up a "School-To-School Connection Phase I" Project Implementation
Leading Group, with members appointed by both Parties. Under the Leading Group
is an Operating Office which will be formed by representatives appointed by both
Parties.
14. Has the right to evaluate the works performed by Party B and identify
any parts deemed unreasonable or unsatisfactory.
Party A shall then help to resolve the problems.
Agreement # 4 : Rights and Responsibilities of Party B
1. The establishment of the Main-trunk Network of the ShanDong Province
Educational Network requires the investment of approximately RMB 56-Million.
Party B promises to inject the required capital in phases. Before the end of
September, 0000, XXX 10-Million shall first be invested mainly for the
establishment of the ShanDong Provincial Educational Information Center.
2. To invest an additional RMB 20-Million before December 31, 2001, mainly for
the establishment of educational resources. The investment shall be increased by
20 % in proportion each year thereafter. With a view of improving the quality of
the educational resources continuously, the resources customers' opinions shall
be consulted every 3 months. Should the complaints deemed reasonable, Party B
shall resolve the problems together with Party A.
3. To assist Party A to set up plans for the establishment of the ShanDong
Province Educational Information Network and the Educational Information Center.
4. Assist Party A to set up the unified system commissioning standards,
and assist Party A to commission the various levels of Portals.
5. Before the end of the calendar year 2002, establishment of the City-Level
Educational Information Center should be completed at the City under the direct
jurisdiction of the ShanDong Province, and more than 50 % of the elementary /
secondary schools should have passed the commissioning of the " School-To-School
Connection Phase I " Project. Party B shall then furnish RMB 0.5-Million to
praise, in the name of Party A, that City. That City shall also be awarded the "
Teng Fai Cup ", funded by Party B.
6. Before the end of June, 2003, establishment of the County-Level Educational
Information Center should be completed at the County under the direct
jurisdiction of the ShanDong Province, and more than 50 % of the elementary /
secondary schools should have passed the commissioning of the "School-To-School
Connection Phase I" Project. Party B shall then furnish RMB $ 300,000 to praise,
in the name of Party A, that County. That County shall also be awarded the " Tu
Kiang Cup ", funded by Party B.
7. Provides satellite reception equipment, application software ( See Attachment
# 1 ) and associated training , free of charge, to those elementary / secondary
schools which have implemented the "School-To-School Connection Phase I "
Project ( approximately RMB $ 4,500 for each school ).
8. Has the right to evaluate the works performed by Party A and identify
any parts deemed unreasonable or unsatisfactory.
Party B shall then help to resolve the problems.
Agreement # 5 : Revenue
1. Revenue sources from the Resources Utilization Fees paid by the subscribing
schools which are connected with the " Morning Sun Resources Center " of the
National Center for Audio / Visual Education under the Ministry of Education
(see Attachment # 1 for details ).
2. Resources Utilization Fees will be collected by the " Operating Office " as
specified in Agreement # 3, Item 12, twice a year, at the first month of each
academic term and for the rest of the 6 months at one time.
3. Of the utilization fees collected by Party B, 17 %, 10 %, and 8 % shall be
allocated to the County-Level, City-Level and Provincial-Level Educational
Information Centers respectively. The remaining 65 % shall be kept by Party B.
On completion of redeeming the investment by Party B, the standard of
utilization fees collection and the method of distribution of revenue shall then
be reviewed and set accordingly.
Agreement # 6 : Terms of Confidentiality
Both Parties shall keep the materials, information and intellectual rights
belonging to the opposite Party strictly confidential and shall not leak the
same to the third Party.
Agreement # 7 : Changes To And Termination Of Contract
Through mutual consultation by both Parties, changes to or termination of this
Agreement shall be made in written form. Should either Party wishes to terminate
this Agreement, it shall inform the opposite Party 30 days in advance by
writing.
Agreement # 8 : Unpredictable Incidents
Unforeseen, unavoidable and uncontrollable incidents, such as Government order
of prohibition, change of law, fire, earthquake, labor strike, turmoil, war,
power outage, communication circuits breakdown, etc. which has caused one Party
or both Parties unable to implement this agreement,
the responsibility of infringement of contract can then be exempted. The Party
which cannot implement the contract shall inform the opposite Party timely; and
shall provide evidence for the unpredictable incidents should it be requested by
the opposite Party.
Agreement # 9 : Restriction On Transfer Of Rights and Responsibilities
Without any prior written agreement, either Party shall not transfer its rights
and responsibilities endowed by this agreement to the Third Party.
Agreement # 10 : Resolution of Disputes
Any dispute arises during the implementation of this contract shall initially be
resolved through friendly consultation. However, should the consultation fails,
both Parties agree that the dispute be arbitrated by the Beijing Arbitration
Committee. The verdict by the Arbitration Committee shall be treated as the
final verdict.
Agreement # 11 : Effectiveness
1. Any uncompleted matters in this Agreement shall be resolved through friendly
consultation by both Parties. Contents and results of the consultation shall
appear in separate agreement, notes or attachment. These documents will form
part of this Agreement and cannot be segregated; and they all carry equal legal
effect as this Agreement after signed and stamped by both Parties.
2. This Agreement is in quadruplicate. Each Party is to retain 2 copies
and they all carry equal legal effects.
3. The effective period for this Agreement is from September 1, 2001 through
September 1, 2014, and will take effect as from the date that this document is
signed and stamped by Party A and Party B.
Party A : Ministry of Education Party B : Beijing Tengtu TianDi
ShanDong Province Network Co. Ltd.
Representative : __________________ Representative : _________________
Date : __________________________ Date : _________________________
Attachment # 1
"School-To-School Connection Phase I" Project for the Elementary / Secondary
Schools in ShanDong Province
List of Products and Fees
Category Product Cost
-------- ------- ----
Product
1. Satellite Reception Card
2. KU11, 30GHZ, 1 PBI High Freq. Head
3. 1 KU1.2M Antenna Free of
4. Tengtu Customer End Charge
Application Software
5. Tengtu Multimedia Teaching
Resources Database ( 100 CD )
6. Tengtu Satellite Resources Database
Management System
Authorized1. 160G/Yr. Satellite Transmitted Teaching Senior High Schools :
Resources Resources Contents RMB 6,000 / Yr.
Services 2. 400 Hrs/Yr. Distance Learning Classroom
Programs Junior High Schools :
3. 1 Yr. Satellite Channel Fee RMB 4,800 / Yr.
4. Free Satellite Technology Training
5. Installation Elementary Schools :
RMB 3,600 / Yr.
Note : 160 G / Yr. Resources ( approximately 300 CD's ) to be donated to
authorized schools.
